Stability or Innovation... What Is the Direction of Samsung's First Personnel Move After Chairman Lee Jae-yong's Inauguration?

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Vice Chairman Lee Jae-yong of Samsung Electronics, who has been indicted on charges of violating the Capital Markets Act, is attending a trial held at the Seoul Central District Court in Seocho-gu, Seoul on October 14. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Han Ye-joo] Samsung Group is preparing for its first regular personnel reshuffle since Lee Jae-yong took office as chairman of Samsung Electronics. The key point to watch is how the company will present its full-fledged 'New Samsung' management strategy amid global management crises such as the 'three highs (3Go)'. With the possibility of reviving the control tower being raised, attention is focused on whether some level of preliminary work will be done in this personnel reshuffle.

According to industry sources on the 20th, Samsung Electronics and its affiliates have traditionally conducted executive and senior management personnel reshuffles in early December every year. The industry expects this year's reshuffle to take place around a similar time.

If Samsung Electronics maintains the 'two-top system' of Vice Chairman Han Jong-hee (head of the DX Division) and President Kyung Kye-hyun (head of the DS Division) in this reshuffle, it can be interpreted as an attempt to ensure management stability. Since less than a year has passed since the CEO changed and the external management environment remains negative, some view it as premature to evaluate them based on this performance report.

The focus is on the successor to Lee Jae-seung, who resigned as head of the Home Appliances Division (President). Lee abruptly resigned in mid-last month, shortly before the regular personnel reshuffle. Given that he had been actively promoting the 'Busan Expo' and global management until just before his resignation, the industry considers this unusual. In the business community, although Vice Chairman Han is currently serving concurrently as head of both the DX Division and the Home Appliances Division, it is expected that a new head of the Home Appliances Division will be appointed in this regular reshuffle, leading to a personnel overhaul across the division. Internally, there is also a view that the recent controversy over the 'washing machine defect incident' is becoming a variable in this reshuffle.

From the vice president level, there are rumors that the scope of personnel changes could be extensive. This is seen as a move to promote stable organizational renewal. Since last year's reshuffle integrated the vice president and executive director positions, it implies that relatively younger vice presidents may be retained or newly appointed.

At the executive level, since the personnel system was reformed this year to enhance organizational flexibility by abolishing the length-of-stay limits by rank, there is a high possibility that young talents in their 30s and 40s will be dramatically promoted. Attention is also focused on whether the '60-year rule,' a characteristic of Samsung's personnel system, will be applied. The 60-year rule means that senior executives aged 60 or older step down from frontline positions, and presidents in their 40s and 50s under 60 are promoted. This principle of generational change in personnel has been used since the late Chairman Lee Kun-hee led Samsung. Currently, there are about 20 executives at the vice president level or above in Samsung Electronics who are over 60 years old.

The number of female executives is also expected to increase further. Following Chairman Lee's management philosophy, which has repeatedly emphasized the importance of recruiting external talent, it is anticipated that external hires will be made boldly.

Attention is also drawn to Lee Boo-jin, president of Hotel Shilla and Lee Seo-hyun, chairwoman of the Samsung Welfare Foundation, who are Lee's younger sisters. Whether Lee Boo-jin will be promoted to vice chairman is a point of interest. Lee Seo-hyun concurrently serves as an advisor to the CSR Research Office at Samsung Global Research, Samsung Group's think tank, so if the group's CSR organization is reorganized, she may take on a new role within the CSR organization.

There is also interest in whether the control tower of Samsung affiliates will be revived through organizational restructuring in this president-level personnel reshuffle. Samsung Electronics revived the previously disbanded Strategic Planning Office during the president-level reshuffle in December 2010.

Regarding the placement of new control tower personnel, figures from the Future Strategy Office (Mijeon-sil) are being mentioned. In the industry, the possibility of forward deployment of Future Strategy Office alumni such as Jung Hyun-ho, who was promoted to vice chairman last year and leads the Business Support Task Force (TF), Park Hak-gyu, head of the Management Support Office (President), and Choi Yoon-ho, president of Samsung SDI, is being discussed. The movements of Kim Soo-mok, head of Samsung Electronics Legal Office, and Kim Myung-soo, president of Samsung C&T, are also attracting attention.

This content was produced with the assistance of AI translation services.